AMD at least has the release of Trinity, Southern Islands to look forward to

Advanced Micro Devices, Inc.'s (AMD) new CEO Rory Read said AMD is working to be a company that "consistently delivers on its commitments."

It looks as though the company has a bit of work left to do.

AMD aired its earnings for (calendar) Q4 2011 late Tuesday and the result was a clear miss. Versus much of the rest of 2011 [1][2][3], where it posted profits, Q4 saw a $177M USD net loss when the results were adjusted to the general acceptable accounting practices (GAAP), the U.S. accounting standard.

Revenue stayed constant from Q3 2011 at $1.69B USD. This is a fairly substantial miss from the analyst consensus earnings target of $1.71B USD [source].

Aside from a slightly depressed gross margin (down 1 percent), the net loss comes largely due to a set of charges (losses). AMD took a $209M USD impairment charge on its investment in the GlobalFoundries chip fab, a $24M USD payment to GlobalFoundries charge, and a $98M USD general restructuring charge. AMD began laying off some employees in Nov. 2011.

AMD warns that the situation will get worse, with weakening demand expected for H1 2012. It's predicting$1.56B USD in Q1 2012 revenue. Previously, analyst targets had hovered around $1.7B USD, but they've since been adjusted down to a slightly more optimistic $1.59B USD.

The chipmaker saw graphics revenue dip 10 percent, with mobile GPU sales down. This dip may be compensated in H1 2011 by the official availability of the Radeon 7000 HD series (codenamed Southern Islands). In the good news department, AMD's "computing solutions" department surged 7 percent in sales, keeping revenue steady from Q3 2011. AMD says its server and chipset sales have improved.

Picture top to bottom: Brazos, the Fusion APU Trinity (middle), and the Southern Islands GPU Tahiti; Trinity and Tahiti are expected to launch in 2012 and give a boost to AMD's revenue
(Trinity's on-die GPU is partially derived Tahiti). [Image is property of DailyTech/Jason Mick]

In total, AMD made a net income (annual profit) of $491M USD in 2011, up modestly from 2010, a critical turnaround year for the firm.

AMD is looking to stay aggressive with pricing, allowing for sub-$500 ultrathin laptops. Assuming AMD can keep its volume of the new chips high, it could see strong sales based on this attractive price point. AMD is confident that its APUs will beat similar Intel Corp. (INTC) Ivy Bridge system-on-a-chip designs in price, battery life, and graphics, though it concedes that Ivy Bridge will likely have more computing power.

AMD shares were puzzling trading 2.6 percent higher, despite the earnings miss and despite the general market being down about a quarter of a percent.